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Famous Patent Wars: 1850-1900

 

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“Regardless of the outcome such a patent war would be cripplingly expensive. Both sides risk wasting immense amounts of money and time while their competition invests in innovation and marketing. To avoid this outcome, large companies obtain as many patents as possible as a deterrent against other companies filing patent litigation. From the perspectives of tech companies, a patent war is like a nuclear war; the only winning move is not to play.”

Source: The Patent Wars

Despite the risks, there are multiple legitimate reasons to start a patent war. Many have; during the 175+ years of industrialization, there have been numerous high-profile, protracted and very expensive disputes over ownership of the underlying inventions fundamental to so many technological milestones.

A common pattern repeats across these industries; win the patent war before winning the marketplace. In the 19th-century, the winners were often the genius inventors (or iterative opportunists) who prevailed in patent litigation before realizing sales and marketing success. As the cost of innovation and patent litigation rose in the 20th century, companies have increasingly replaced individuals as litigants.

What hasn’t changed is the reality of an innovation economy; if a technology is sufficiently promising, someone is going to sue. As revenue projections associated with “promising” rise, so too will the number of individuals and organizations willing to start and escalate patent wars.

In Part One, we look at three of the 19th-century’s most famous patent wars. Two of the three related to technology that would certainly appear on a very short list of inventions with the greatest lasting impact on society.

The years between 1850 and 1900 were a time when intrepid inventors and confident investors saw opportunity in the industrialization that was creating massive and rapid changes in the American economy. Let’s meet some of them.

 

Sewing Machine Patent War (1852 - 1856)

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The clothing American families wore and the interior decoration of the homes they lived in changed began to change in the 1850s when functional sewing machines became widely available. The first machines essentially aggregated numerous patented innovations, meaning that every machine infringed multiple patents. What followed was years of threats, litigation, and legal innovation. By the time it ended, Singer had become one of the most well-known consumer brands in the world.

The sewing machine patent war began in 1852 when Elias Howe, who had patented the lockstitch in 1846, sued Isaac Singer for patent infrin

gement. Singer, who had made some important improvements such as inventing a thread controller, and figuring out how to combine a vertical needle with a horizontal sewing surface, rejected Howe’s initial demand for a $2,000 royalty for the right to U.S. patent #4750. Suits and countersuits followed before both sides reached an accord in 1854 and started suing competitors.

Round two began in August 1854 after Howe and Singer ran an advertisement in Scientific American warning consumers of the infringement risk due to “buying any of the numerous infringer machines in the market.” Manufacturers of those “infringer machines” were incensed. For the next three years, I.M. Singer & Co., the Grover and Baker Sewing Machine Company, Wheeler and Wilson & Co. and other patent holders were involved in dozens and dozens of separate lawsuits.

Peace was finally achieved by creating the first patent pool. Orlando Brunson Potter, president of Grover and Baker proposed that Howe, Singer, Grover and Baker and Wheeler and Wilson combine their IP, charge a single licensing fee, and split the revenue proportionally based on the importance of their contributions. They contributed nine patents to form the Sewing Machine Combination. The key assets were Singer's vertical needle and horizontal sewing surface patent, Howe’s lockstitch patent, and Wheeler and Wilsons’ patent on the four-motion feed.

As consumer demand rose and licensing fees dropped sharply, dozens of sewing machine brands appeared on the market. Home sewers were also aided by the introduction of dress patterns in 1863.

By 1880, Singer was gone from the company he founded. In addition to his original engineering innovations, the company’s sales and marketing creativity were also critical. For example, I. M. Singer & Co. launched the first installment-payment plan in the United States, and hired a door-to-door sales force to collect weekly payments and demonstrate machines. Urban showrooms were also opened, and machines demonstrated at fairs and events.

And Howe? While he concentrated on licensing and infringement actions, he did form the Howe Machine Company in 1865 with partners. He didn’t, however, play a role in the company’s modest future success because he died in 1867. By then he had reportedly earned more than $2 million from licensing.

Additional Reading:

Smithsonian Magazine: How Singer Won the Sewing Machine War

Slate: The Sewing Machine Patent Wars: What a 19th-century episode tells us about smartphone litigation today

 

Telephone Patent War (1876 – 1880)

Like the sewing machine, the invention of the telephone was the aggregate of the successes and failures of many 19th-century scientists. European and North American inventors, notably Alexander Graham Bell, Elisha Gray, Charles Bourseul, Innocenzo Manzetti, Antonio Meucci and Johann Philipp Reis tinkered in labs and garages, progressively increasing their knowledge of vibrations, the properties of water, microphones and electromagnetism.

Samuel Morse’s inventions of inexpensive telegraph and Morse Code had made long-distance communication a reality by the 1840s. A huge commercial success, they were quickly becoming an indispensable part of America’s expansionist boom. Voice communication was clearly the next milestone.

By the mid-1870s, Bell and Gray had both identified that variable resistance was the technological key to send an uninterrupted current through wiring. Fortunately for both, the requirement of a working model of an invention had ended in 1870. Inventors only had to submit descriptions of their ideas to the USPTO, which Bell and Gray both did on February 14, 1876. It’s certainly one of engineering history’s strange coincidences.

Bell’s application for "Improvements in Telegraphy" described an “apparatus for transmitting vocal or other sounds telegraphically." Gray’s lawyer followed this several hours later by filing a patent caveat (notice of intent to file for a patent within three months) for “the art of transmitting vocal sounds or conversations telegraphically through an electric circuit.” Whether the oft-repeated folklore that Bell’s application was submitted first may or may not be true, what is historically verifiable is that patent examine Zenas Wilber received Bell’s application first. It was, of course, successful.

Bell’s patent, and others he was issued were frequently litigated. Without a working model for reference, subsequent inventors simply claimed that Bell’s original invention just didn’t work as described. His opponents were partially correct; Bell’s transmitter, which changed sound waves into electrical current, wasn’t powerful enough for long-distance conversations.

Thomas Edison became part of the narrative by patenting a carbon-based transmitter design that was much better than Bell’s. (It must have been because it was used in phone handsets until the 1970s). Edison filed his transmitter patent application in 1877, and was then involved in years of infringement litigation over the invention of “loose contact conductors,” which had also been patented by Emile Berliner.

Edison realized early that one of the ways to avoid and evade infringement cases was to set up overseas to commercialize his Made in American IP. A common tactic was to incorporate in London, which is how The Edison Telephone Company of London was founded.

Two of Bell’s highest profile fights were against Western Union and Edison’s London operation. Western Union, which had passed in 1876 on acquiring Bell’s patent rights for $100,000, quickly realized its error. Unfortunately, Bell and his investment partners had created the Bell Telephone Company and were no longer interested. Seeing an opportunity, they sued Western Union for infringement in 1878.

Bell’s IP rights included the telephone, parts of the receiver, and a transmitter using Berliner’s invention, which it had acquired for $50,000. On the other side was the dominant force in the telegraph industry, which had signed agreements with Gray, Edison and others for rights to their inventions, including Edison’s transmitter. Western Union had already connected much of the country with telegraph wires, had rights to the induction coil, and could make the claim that Gray should have been issued rights to the telephone.

The drama didn’t last very long. In Nov. 1879, the decision went against Western Union. The telegraph giant lost its patents, and had to walk away from its handset business and thousands of customers. In 1880, Bell was successful convincing the British government to rule against The Edison Telephone Company of London. It wasn’t the end, however, as other litigation continued, including an 1888 United State Supreme Court decision upholding the priority of Bell’s patents.

In total, Bell was a litigant in close to 600 cases. His investment in IP and the early courtroom success of the Bell Telephone Company created the foundation of one of the most ubiquitous monopolies in American history. It lasted until 1984 when the US federal government forced the successor company, known as AT&T Corp, to break up its Bell System monopoly into seven Baby Bells.

Additional Reading:

IP Watch Dog: What can Alexander Graham Bell Teach us about Patent Filing?

Telecom History: The Telephone Patent Follies

 

Incandescent Light Bulb (1877-1889)

"To all whom it may concern: Be it known that I, Thomas Alva Edison, of Menlo Park, in the State of New Jersey, United States of America, have invented an improvement on Electric Lamps, and in the method of manufacturing the same, (Case No. 186,) of which the following is a specification….”

Edison was nothing, if not, prolific. The telephone transmitter was just one of his innovations. By the time he died in 1931, he had been issued more than 1,080 patents, earning fame and fortune as the inventor of the phonograph, motion picture camera, and long-lasting electric light bulb. His involvement and manifest success in commercializing lighting is the reason the last 20 years of the 19th-century included multiple patent disputes covering not only incandescent light bulbs, but the entire electricity distribution system from power source to end-user.

It’s important to clarify Edison’s role in the incandescent light bulb timeline because the technology had existed well before he turned his attention to lighting in 1878. The theory behind incandescent lighting dated back to 1747 and an Italian monk named Giuseppe Ponzelli.

As theory, it was simple; heat a wire filament enough and it will glow, something American scientist Ebenezer Kinnersley capably demonstrated in 1767. As an engineering challenge, however, transforming incandescent lighting from the theoretical to practical was brutally hard.

It took really smart people well over a century to figure out how to make it safe and commercially feasible. Between Kinnersley and 1889 was decades of trial and error as inventors tested tens of thousands of combinations of shapes, wires, materials, and evacuated or semi-evacuated enclosures.

Some successes were patented; Frederick de Moleyns was granted the first incandescent lamp patent in England in 1841 for a design using platinum wires contained within a vacuum bulb. In 1850, Joseph Swan, a British physicist and chemist, began experimenting with carbonized paper filaments in a vacuum. Henry Woodward and Mathew Evans filed a patent in 1874 to protect a design for a lamp consisting of carbon rods mounted in a nitrogen-filled glass cylinder. Unable to commercialize it, they sold U.S. Patent 0,181,613 to Edison in 1879.

1878 saw the creation of the Electro-Dynamic Light Company to exploit the patents of inventor William Sawyer. Sawyer had made important advances in filament testing and found a financial partner to back him. Edison had also decided in 1878 to turn his relentless energy to the question of commercially viable incandescent  lighting. "Improvement In Electric Lights" was his first application. Within a year, he had a carbon filament bulb that burned for 13.5 hours. On November 4, 1879 he filed a US patent application for “Electric Lamp,” a lamp using "a carbon filament or strip coiled and connected ... to platina contact wires.” U.S. Patent No. 223,898 was issued in January 1880.

Swan had long-recognized the potential in carbon filaments and protected his method of treating cotton to produce “parchmentised thread” with British Patent 4933 in Nov. 1880. It was strong enough to win an infringement case against Edison and force a merger of their companies into Edison & Swan United. Edison eventually bought out Swan’s interest.

Like the sewing machine patent war, the light bulb patent war encompassed multiple litigants. In total, there were hundreds of lawsuits associated with the technology’s progressive development. Edison’s companies were sued dozens of times.

Between 1880 and 1885, both The Electro-Dynamic Light Company (and its successors) and the Edison Electric Light Company were rivals in the marketplace and the courtroom. In October 1883, the USPTO invalidated Edison patents, ruling that they were based on Sawyer’s prior art. Appeals followed. Finally, an October 1889 judgement validated Edison's electric light improvement claim for "a filament of carbon of high resistance." Sawyer’s inventions, patented before and after his death in 1883, ended up as the property of The Westinghouse Electric Company.

What distinguished Edison from other litigants was his foresight that electricity would require an integrated system. Between power generation and street cars, the factory floor and home lighting was a complex distribution network. Edison’s huge R&D program and patenting activities reflected the many opportunities he identified. In 1881, he filed twenty-three applications on electric lighting inventions. The following year, he filed 87 more covering electric lighting, electric railways, and secondary batteries.

George Westinghouse understood the future, too, which is how he and Edison ended up as opposite sides of the War of Currents. It ultimately ended in the 1890s with the adoption of alternating current to distribute electricity.

Additional Reading:

The Business History Conference: William M. Sawyer and the Rise and Fall of America's First Incandescent Electric Light Company, 1878-1881

About.com: Thomas Edison patents


In Part Two of our Famous Patent Wars series, we look at some of the most famous disputes that took place between 1900 and 1950, which shaped the early days of travel and communication. 

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